Brexit: UK real estate investor looks to snap up European offices to capitalise on looming bank exodus

Property investors are looking for office spaces the banks may need after the UK leaves the EU

The skyline of Frankfurt, Germany (Getty)

Banks are planning to move business overseas in the first few months of 2017, Anthony Browne, chief executive officer of the British Bankers’ Association, warned on Sunday, and some property investment companies are already looking to acquire new offices for their clients.

Schroder European Real Estate Investment Trust, a London-based property investment trust, is looking for an office space in Frankfurt on behalf of its third party clients, in anticipation that the bankers exodus from London following UK’s vote to leave EU will boost values in the German financial centre.

According to a report by Bloomberg, CBRE Global Investors and Standard Life are also seeking to acquire office buildings in cities such as Dublin and Amsterdam.

“The potential additional growth as a result of companies relocating from the UK enabled us to be firmer on pricing and financial underwriting,” Tony Smedley, a fund manager at Schroders, said.

In a separate statement send to The Independent he said: "We have been managing assets in Germany for many years and we operate a large, regulated real estate fund management business from Frankfurt. Germany represents a significant part of the investable universe in Continental Europe, is a very liquid, mature and established market and has been the fastest growing economy in Western Europe for a number of years."

Up to 70,000 financial jobs could be lost if Britain leaves the EU without a new relationship in place for the City of London, according to TheCityUK.

UK banks fear that a hard Brexit will result in the UK leaving Europe’s single market and therefore the loss of crucial passporting rights, which allow them to sell their services freely across the rest of the EU and give firms based in Europe unfettered access to Britain.

Property firms are investing in office buildings the banks may need once the UK leaves the EU. “We believed that before Brexit, but we believe it even more now because of the inquiries coming from companies seeking to locate some functions in other locations,” Jeremy Plummer, chief executive officer for for Europe, the Middle East and Africa at CBRE Global Investors, told Bloomberg.

Open Europe, which took a neutral stance on the referendum, warned that losing access to the single market could cost banks in the UK as much as £27bn, or a fifth of their annual revenue.

Mr Browne said: “Banking is probably more affected by Brexit than any other sector of the economy, both in the degree of impact and the scale of the implications."

Smaller banks could begin moving some operations overseas within weeks, with larger institutions following in the first few months of 2017, he predicted.

The Government is reportedly considering making future payments to the EU to secure privileged access to the single market for City firms to continue trading across the continent.